Disclaimer 免責聲明

The views & opinions expressed are the dealers' own and they do not represent the views of UOBKH. The content is written in their personal capacity and is in no way related or associated to UOBKH. Please read disclaimer page here.

Tuesday, March 28, 2017

JUMBO SP | +180% outperformance; time to take-profit near 75cts

My view:

S'pore-Small-Cap-pick | JUMBO SP: Px/Tgt: SGD0.69/0.67

My View:

1.        Investors that took our IPO in Nov 15 & have made an +180% outperformance over the last 17 months (from IPO 25cts to 69cts now).

2.        Although we have a HOLD call, I am of the view that JUMBO SP has run its course & time to TAKE-PROFIT near 75cts:

        a.        Osim Chairman bought over Temasek's stake at 63cts in Jan 17
        b.        Share price likely to trade in a band 60-75cts with no major catalyst to punch through 80cts unless valuation expansion
        c.        Rich 2017 PEG of 1.6x (PE 24x vs EPS growth 15% over next 3 years).

3.        Why Investors still like it albeit at lower share price:

        a.        Fair dividend yield of 2.5% & pay out ratio to be expanded from 40% to 50%
        b.        Investors are in & still nibbling because these stocks are like 'safe-harbours' & not exposed to jittery markets or bad sentiment                                

4.        UOBKH Research has a HOLD with a slightly higher DCF based target price of S$0.67. Suggested entry price is S$0.61. However, the franchise agreements have the potential to surprise on the upside while an accelerated roll-out of new store openings from franchisees could lift our target price.

Thanks & Regards

Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

Friday, March 24, 2017

Asia Casino | Prefer SJM (880 HK) /Sands China (1928 HK) /Genting Bhd (GENT MK)

My view:

Asia-Casino-picks | Theme: BUY-10%-lower-&-4%-dividend-yield

Macau Casino:

BUY:
1.        SJM (880 HK) Px/Tgt HKD6.33/7.30
2.        Sands China (1928 HK) Px/Tgt HKD35/40


HOLD:
1.        Galaxy (27 HK) Px/Tgt HKD41/38


SELL:
1.        Wynn Macau (1128 HK) Px/Tgt HKD15.64/14.00
2.        MGM China (2282 HK) Px/Tgt HKD15.88/13.20


Asean Casino:

BUY:
1.        Genting Bhd (GENT MK) Px/Tgt MYR9.69/10.45


HOLD:
1.        Genting S'pore (GENS SP) Px/Tgt SGD0.99/1.01
2.        Genting HK (GENHK SP) Px/Tgt USD0.29/0.28
3.        Genting Malaysia (GENM MK) Px/Tgt MYR5.45/5.10




1.        Share price has broadly gone up +20% from Nov 16 low level. Although most Fund Managers are of the view that there is likely a further +20% upside (as Macau casino sector recover from -80% fall from Jan 14 to Jun 16 from China anti-corruption measures); I am of the view, Macau Gaming stocks are good BUYs a further -10% lower once the negative sentiment against the likely fall-out from on-going anti-corruption drive & non-use of the China Union pay cards from Macau Casinos abates (and other measures against black-market transfer of Yuan out of China).


2.        I am still upbeat on Macau Casino stocks (buy -10% lower). As negative sentiment abates & stabilise, I am expecting a further +20% upside across the board as fundamentals improve & liquidity BUY flows kick-in into these HIGH BETA LARGE CAPS with good 4.0% dividend yield.


3        I am pretty upbeat on share price outperformance ahead of the Macau Casino given that share price of SJM/Galaxy/Sands China/Wynn Macau will be chugging up well on the back of improving prospects 1) GGR  +10% in 2017 (Macau), GGR +2% (Mal), GGR +2% (S'pore), 2) prefer Macau Casino (another -10% lower) over Mal/Sing/Phil Casinos.


4.        UOBKH Research maintains to MARKETWEIGHT. Sentiment in Macau is improving, underpinned by a strong 1Q17 GGR. Markets are forecasting a bullish growth recovery above 10% yoy this year. We see markets have started to price in an optimistic 2018 prospective in anticipation for the completion of various infrastructure projects that will boost visitation. While we have lifted our GGR forecasts to 8-10% yoy, we remain cautiously optimistic, especially on the sustainability of the VIP market. BUY Sands China and SJM.


5.        UOBKH Research has BUYs. In terms of preference under our coverage universe:


        a.        SJM is my top-pick, and a cheap proxy to Macau's gaming market growth and more importantly, it pays a decent 4% dividend.


        b.        Galaxy for its long-term prospects as we foresee their earnings in next few quarters continuing to be driven by Galaxy Macau's increasing business volume and margin improvement.


        c.        Sands China, as the ramp up of Sands Cotai Central (SCC) should ensure 25% EBITDA growth in 2017, driven by growth in foot traffic, rising betting volumes and margin improvement.


        d.        Wynn Macau, although we have a SELL rating as we believe the company's near-term growth would continue to be restricted by the limited growth potential on its existing property, we also think that the company will be attractive to investors who are seeking good dividend returns.


        e.        GENT for its steady growth, driven by its VIP programme, and intermediate-term opportunities from the ongoing gaming liberalisation in the US. Lastly, GENT's valuation should recover post-GE as history suggests, being one of the cheapest casino stocks in our coverage universe at 8x 2017F EV/EBITDA.


        f.        GENS and GENHK in Singapore. GENS is likely to be impacted by a further contraction in mass market GGR but value is emerging, and GENHK's 50%-owned Resorts World Manila will face its first formidable challenge in the integrated resort-and-casino (IRC) space.


UOB Kay Hian Research issued a report dated today on the above topic. Please contact us for the full research analyst report.

Thanks & Regards
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

Thursday, March 23, 2017

Singapore Banks | Continue to buy DBS /UOB /OCBC despite +20% upside from trough level

My view:


S'pore-Bank-picks | Theme: Despite-recent-rebound-we-are-near-2003-SARs-PB-1x-2008-GFC-PB-0.7x-when-it-should-be-doing-1.5x-for-DBS SP.

Top-pick:
1.        DBS (DBS SP) Px/Tgt SGD18.67/21.50

BUY:
2.        OCBC (OCBC SP) Px/Tgt SGD9.45/10.75
3.        UOB (UOB SP) Px/Tgt SGD21.53/23.00 (my tgt)

1.        I have called a BUY on S'pore Banks at end Oct 16 near its lows & share price has chugged up +20%.

2.        Looking ahead, I am looking at further prudent 15% upside because:

        a.        Share price has broken up from recent Dec 16 high (+5% upside)
        b.        DBS doing 2017 PB 1.0x (1.0x PB at SARS level in 2003 & 0.7x GFC level in 2008) when it should be doing about 1.5x (mid-cycle PB; prospects are much better now than in 2003/2008)
        c.        Flat NII /Fees /Trading Income priced-in

3.        UOBKH Research has OVERWEIGHT S'pore Banks. Our analysis indicates that average upside for banks to their upcycle peak ranges from 50% to 80% based on a re-rating of their P/B. The potential upside is augmented by organic increase of 5-6% per year in BVPS.

4.        The S'pore Banking sector still faces headwinds from the O&G sector in 4Q16. However, the outlook is brighter for 2017 as we believe banks have already recognised the larger troubled accounts as NPLs. Interest rates are also on an up-cycle due to the pick-up in inflation, and banks are natural beneficiaries.

5.        DBS and OCBC trade at 2017F P/B of 0.99x and 1.03x, which is near 1xSD and 2xSD respectively below long-term means. They also provide decent dividend yields of 3.2% and 3.8% respectively.

6.        SECTOR CATALYSTS
        a.        Rising interest rates and bond yields.
        b.        Easing of pressure on asset quality from the O&G sector.
        c.        Decent 2017F dividend yield of 3.2% for DBS and 3.8% for OCBC.

UOB Kay Hian Research issued a report dated today on the above topic. Please contact us for the full research analyst report.

Thanks & Regards
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

Singapore Strategy | Buy Quality laggards /Deep value cash rich companies

My view:

STRATEGY – SINGAPORE

The FSSTI looks fairly valued after the 9.9% ytd rise. We highlight some screens and stocks to position in for further outperformance in 2017.

WHAT'S NEW
What now after the firm outperformance? 

The FSSTI has done well, rising 9.9% ytd and is currently above our year-end target of 3,050. Our target is based on a 15% discount to the long-term mean PE and P/B for the FSSTI. At current levels, the market is trading at 2017F PE of 15.3x, which is its long-term mean since 1995. Since the FSSTI is not cheap, we would look for outperformance in: a) quality laggards, b) top slicing outperformers, c) deep-value cash-rich companies, and d) special situation stocks.


UOB Kay Hian Research issued a report dated today on the above topic. Please contact us for the full research analyst report.

Thanks & Regards
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

Friday, March 17, 2017

SIA SP | BUY < SGD 9.50

My view:

Singapore Aviation Pick | SIA (SIA SP) Px/Tgt SGD 9.97/10.40 | Theme: BUY < SGD 9.50 as prospects are lousy

1.        Personally, I think SIA SP has lousy prospects because:

        a.        SIA benefits from low oil price BUT most of its jet-fuel are hedged at higher prices; so likely to have muted benefit
        b.        Fundamentals are weak with passenger & cargo over-capacity likely to impact break-even loads negatively (although we see very marginal improvements in Jan-Feb 2017)
        c.        Its regional routes is profitable but its long-haul routes are not that profitable because of high costs

2.        Although, most Investors are pitching a BUY at FY17 PB 1.0x, SIA SP at PB 0.8x is trading at a small 20% dicount to its 10-year mean PB of 1.0x, I argue that current ROE of 4% is way too low compared to about 12% ROE of the past decade. They say that SIA SP is facing a structural problem & there is a paradigm shift in valuations downwards to sub-0.8x PB going forward. Despite lower jet fuel price, SIA is still wrestling with bad prospects.

3.       UOBKH research has a HOLD & propose a SGD 9.90 entry level. SIA's pax load factor rose 2ppt yoy in the Jan-Feb period, while cargo loads also improved. This holds scope for a strong 4Q and potential upwards earnings revisions, especially if the improvement in loads continues into March. In addition, we believe the odds of pax yields declining substantially from current levels are low.  Should pax yields stabilise in 4QFY17, the stock will likely be re-rated upwards.
 
4.        All eyes on extent and level of fuel hedges. Guidance on FY17 fuel hedges will have a significant bearing on overall cost estimates. SIA has hedged 40% of jet fuel requirements at Brent US$55/bbl until 2022. We have estimated weighted average jet fuel cost at US$55/bbl for FY17.

UOB Kay Hian Research issued a report dated today on the above topic. Please contact us for the full research analyst report.
 
Thanks & Regards
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

Thursday, March 16, 2017

Iskandar Waterfront City IWCB MK | Bear /Fair /Bull Case point to a very likely upside above MYR3.50

My view:

1.        I am of the view that the generous injection of parent Iskandar Waterfront City Holdings (IWCH) into IWCB MK is greatly beneficial to existing IWCB MK shareholders. Trawling through all the details, Investors just need to know the sensitivities of MYR /psf injection of landbank into IWCB MK to gauge the potential upside.

2.        I am of the view that potential share price upside of IWCB MK is as follows:

        a.        Price 9/3:                MYR 1.58
        b.        Price 15/3:                MYR 2.75
       
        Potential Upside:

        a.        Bear Case:                MYR 2.71                -2%
        b.        Fair Case:                 MYR 3.39                +25%
        c.        Bull Case:                  MYR 4.08                +50%

3.        UOBKH Research is super-UPBEAT on the share price upside prospects of IWCB MK. Based on available information, the fair value for the new-IWH ranges between MYR 2.71-4.08/share. The key variable value would be for the remaining saleable area for the Bandar Malaysia development. Trading discounts for developers under our coverage range between 20% and 52%, with Johor-centric developers (UEM Sunrise and Sunway Bhd) trading at 30-43% discount to RNAV. However, note that the RNAVs for other developers within our coverage are based on discounted future profits of their developments, whereas the RNAV for the new-IWC is based on landbank value without taking into account the NPV enhancements should the lands be developed.

UOB Kay Hian Research issued a report dated today on the above topic. Please contact us for the full research analyst report.
Thanks & Regards
Any expression of trading idea found on this website is for sharing only and does not constitute an invitation to trade or investment advice. Please read disclaimer page here.

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